India’s edtech sector has entered a fresh phase of visibility and renewed investor interest. The most notable indicator came this year, when PhysicsWallah debuted on the public markets at a valuation of around $5.2 billion, signalling that investor appetite for large-scale education platforms is resurfacing.

But while the sector sees new milestones, Byju’s which was once the edtech sector’s most celebrated startup remains entangled in one of the most complex insolvency proceedings in recent memory, marked not only by financial distress but also by procedural intricacies that continue to prolong the case.

At its peak, Byju’s was valued at $22 billion and widely regarded as India’s global edtech success story.

Today, the company faces a long list of litigations from investors, lenders, vendors, and international creditors.

Among all these disputes, the insolvency case initiated by the Board of Control for Cricket in India (BCCI) stands out,  not only because of its origins, but because of what followed after the dues were paid.

How Byju’s Insolvency Began and How the ₹158-Crore Dues Were Cleared

Byju’s insolvency formally began on 16 July 2024, when the National Company Law Tribunal (NCLT), Bengaluru, admitted a petition by the Board of Control for Cricket in India (BCCI) over unpaid sponsorship dues amounting to ₹158 crore.

Court filings indicate that the ₹158-crore liability owed to the BCCI was cleared using funds arranged personally by promoter Byju Raveendran, after the company expressed its inability to make the payment during the liquidity crunch.

The filings note that the amount was raised through the monetisation of individually held and family-owned immovable assets. The BCCI confirmed receipt of the full settlement and formally communicated this to the insolvency authorities, expecting the insolvency proceeding to be withdrawn.

This resulted in the 2 August 2024 NCLAT order dismissing the insolvency altogether after accepting the BCCI–Byju’s settlement.

However, the insolvency did not end. In fact, what followed was more complicated.

The Entry of Glas Trust and the 99% Voting Block

Glas Trust LLC, a US-based security trustee representing lenders of Byju’s $1.2-billion Term Loan B raised in 2021 through overseas subsidiaries is one of Byju’s financial creditors. Now as the CIRP progressed, Glas Trust challenged the settlement in the Supreme Court arguing that the ₹158 crore should not have gone to BCCI but to financial creditors.

As a result, in October 2024, the Supreme Court set aside the settlement on procedural grounds, because under Section 12A of the Insolvency and Bankruptcy Code (IBC), any withdrawal of insolvency after CoC formation requires 90% approval, regardless of whether the initiating creditor has already been paid.

Now the composition of the CoC has tilted the playing field. As per NCLT filings, the composition shows:

Glas Trust LLC: ₹11,432 crore claim → 99.41% voting share

Aditya Birla Finance: ₹47 crore → 0.41%

InCred Financial Services: ₹20 crore → 0.18%

ICICI Bank: No verified claims → 0%

So, with Glas Trust holding near-total voting power, their position effectively became the determining factor in whether the CIRP could be withdrawn, and since they have not given their approval yet, the case is still continuing.

But the most shocking fact here is that BCCI and Byju Raveendran are contending that that settlement was legitimate and done before the COC was formed, and hence the case should have been closed then and there.

Promoters Believed the Case Should End — But Procedure Prevails

From the promoters’ perspective, the insolvency should have concluded once the dues to BCCI were cleared and acknowledged. But Glas Trust opposed the withdrawal, arguing:

that the source of the ₹158 crore should be scrutinised,

that ongoing investigations necessitated continuation of CIRP, and

that procedural lapses occurred in how the settlement request was routed.

Even as GLAS Trust continues to push aggressive legal action against Byju's, questions persist about the consortium’s own credibility and intent. The group which was disqualified as a lender for not being the original creditor and was, at one point, excluded from the CoC altogether, repeatedly issued directions to the then suspended resolution professional (RP) Pankaj Srivastava, without any legal standing at the time.

Srivastava has stated in his filing that GLAS Trust “had no legal backing” to instruct an insolvency professional, yet continued to influence the process through its counsels. He also stated that the consortium’s counsels allegedly threatened him with “personal consequences” if he did not appoint their preferred advisor.

Byju's also highlights concerns over Glas Trust’s approach as a creditor bloc, with comparisons drawn to vulture lenders whose incentives are often tied to distressed-asset recovery rather than business continuity. Their actions—such as resisting settlement pathways, challenging resolutions, and causing operational standstills—have coincided with delays in salary disbursements, full-and-final clearances and routine payments, even after the initiating creditor, BCCI, confirmed receipt of its dues. While these allegations remain part of an ongoing legal and regulatory process, they have sparked debates on whether Glas Trust’s stance aligns with the IBC’s objective of resolution, or whether it reflects a creditor position more focused on enforcement than revival.

THE MATHEMATICAL CASE: NUMBERS THAT SHAPED THE COMPANY’S FINANCIAL STORY

While the insolvency is now a procedural matter, the broader financial picture includes a set of numeric contradictions that have repeatedly surfaced in public discussions.

The Financial Paradox: The ₹158-Crore Litmus Test

The founders claim that they personally funded ₹158 crore, not from corporate accounts or offshore structures, but by liquidating personal and ancestral assets.

This action sits in contrast with allegations that $533 million was siphoned abroad — allegations that the founders have denied in multiple proceedings.

A key behavioural contradiction emerges: individuals with access to alleged hidden funds typically do not sell primary assets to settle operational dues. These facts have been repeatedly referenced in legal and financial filings, forming a central part of the debate around intent.

The Reverse Exodus of Capital: An $800 Million Liquidity Swing

Industry norms indicate that founders of late-stage unicorns often secure $300–$400 million in personal liquidity during peak valuations.

By contrast:

In March 2022, when Byju’s raised capital, founder Byju Raveendran invested $400 million of personal funds into the company.

This creates an $800 million difference when compared to a typical $400 million founder cash-out.

Over the last 24 months, the three founders have collectively injected over $1 billion into the company during their period of control.

These injections do not resolve the insolvency but provide context on promoter liquidity behaviour during the company’s rise and downturn.

Operational Austerity: Documented Domestic Transfers vs. Allegations

During the initial liquidity crunch, founders covered teacher payrolls from personal funds. Multiple transactions — including the ₹158 crore settlement and the $400 million founder investment — are recorded as domestic, traceable inflows.

This contrasts with the US-based allegation of $533 million diverted, which remains contested in overseas courts. Again, these figures do not determine guilt or innocence — they are part of the publicly available financial trail associated with the company.

A Case Driven by Law, Not Just Liquidity

What began as a straightforward payment dispute between a sponsor and a sports body has evolved into a procedural test case for India’s insolvency system.

Byju’s is not the first company to learn that under the IBC, settling dues does not automatically close the door once CIRP has been admitted. But given the size of the company and the global attention on the sector, the outcome of this case will likely set an important precedent.

For now, the edtech giant remains in a legal limbo, i.e. a situation shaped not by whether a payment was made, but by how insolvency law requires that payment to be processed.

(The above story first appeared on LatestLY on Nov 24, 2025 06:22 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).